Managed code in SQL Server Yukon: A big deal?

The next release of Microsoft's SQL Server database, which is currently known by its code name of Yukon, allows managed code to be executed within the confines of the database server's process. There has been mixed reaction to Yukon's managed code features, ranging from unbridled jubilation and proclamations about the death of application servers and the middle tier, through to deep pessimism and pledges of managed code disablement. This article attempts to answer the question: when does managed code make sense inside the database?